Japan bakery market

Piping hot Japanese pâtisserie market has momentum! Time for investors to savour the taste

Life is what you bake it, runs the adage.

There is a dietary shift in Japan. Historically rice was the main staple, but its per capita consumption is declining year on year. There are more single person households; preparing rice is a hassle especially if you a busy 20 year-something. Rice consumption is also dropping amongst the elderly, some of whom say eating bread is easier and less of strain on the stomach.

Today in Japan there’s higher spend on bread than rice, around JPY31,000 ($226) per capita.

I’ll admit that much of what passes for bread in mainstream retail outlets is disappointing, especially if you have been spoilt by frequent visits to France.

However, step outside of the mass retail channels in Japan and there are a surprisingly large number of independent and very high class bakeries. Many would give Paris’s finest a good run for their money.

Last weekend I shopped at Paris ん in central Osaka. The patisserie was more noticeable for the long queue outside rather than its signage or even web presence, both of which were a little underwhelming.

Savour these pictures!

Photos: Rupert Sutton

There are over 11,000 independent bakeries in Japan. There are also very significant regional variations.

Many clients focus on the Tokyo region. It’s understandable as it’s the capital, however I often say to clients that focusing just on Tokyo is shortsighted. Not everything revolves round the Yamanote line.

Bakery is an example. Spend on the category is much higher in West Japan, especially Osaka and Kobe – 1.25 times the national average. Several German bakers established businesses in Kobe decades ago which still flourish.

Are there big national bakery chains? A few. Andersen part of Takaki group is perhaps the biggest in what I describe as ‘specialists’. Although it has a Danish positioning it’s a 100% local firm, based in Hiroshima. It’s also a privately held company with several fascia, 6 factories and over 2000 staff. Andersen has also several international ventures too. No petit baguette for sure. Andersen has sales over JPY54bn (US$394m) and shows how clever marketing, innovation and vertical integration can be a highly profitable recipe.

Japan imports a substantial amount of bakery ingredients and equipment. Just last year baking oven imports were worth over $5m with the majority coming from the US, Sweden, Germany and Italy.